Rise of the Chinese Ghost Town

In Chenggong, there are more than a hundred-thousand new apartments with no occupants, lush tree-lined streets with no cars, enormous office buildings with no workers, and billboards advertising cold medicine and real estate services – with no one to see them.

As my colleagues and I wandered, on–foot, down the center of Chenggong’s empty 8-lane boulevards and dedicated bus lanes, never seeing a single person, we marveled about the fiscal and political conditions that would have to exist to create something like this.

In February this year, Geoff Dyer wrote an article for the Financial Times, “China: No One Home”, in which he chronicled the eerie emptiness of this new town development near the city of Kunming, in southwestern China. He wrote:

“Construction started in 2003 and the results are now apparent in 13 immaculate local government buildings, each clad in marble tiles. A high school boasts an impressive indoor swimming pool and several of the region’s main universities have built large campuses. Pristine high-rise apartment blocks stand in rows, their new windows glinting in the subtropical sun.

The one drawback: at the moment, Chenggong is almost completely empty. Its wide streets are all but bereft of traffic, a bank branch has no customers and leaves collect in the foyers of the municipal offices.”

In June, I accompanied a World Bank mission to Kunming, where the Bank is supporting the development of a new light rail system. Upon learning that two stations had already been built in Chenggong, my colleagues and I just had to go see for ourselves -- just what does a modern Chinese ghost town really look like? Well, here it is.

Dedicated bus lanes without routes assigned to them – stations without purpose

Lush park with no vistors, taxi stand with no taxis

One of many impressive, yet unoccupied, government buildings

Chenggong springs from a typical development pattern seen throughout the country – cities that are rapidly growing in population and becoming increasingly congested develop satellite towns far from the urban core, relocating university, government, or other uses to kick-start the new town’s development. It is hoped that these new towns will, in addition to alleviate urban congestion, spark further in-fill development in the expanse of farmland that sets the new town apart from the city center – a kind of pre-planned suburban sprawl. Funding for these new towns comes from the difference paid to compensate farmers to relocate (a calculation based on potential agricultural yields) and the substantially higher revenue generated from leasing the same land to developers.

So, while the development pattern is typical, the unusual feature about Chenggong is the stalled occupation. It seems, according to one local, Kunming government officials, surprisingly, do not actually want to relocate to this empty suburban town, and there are rumors that the multiple blocks that comprise the new government center will be scrapped and sold to private entities. But these are just rumors. In reality and in all likelihood, after the light rail lines are completed, it will not be long before Chenggong bursts into life, giving this ghost town its chance to live.

Chenggong’s interesting planning history and future aside, since this is a transport blog, let’s take a look at what has been built here and imagine, if the town were ever populated, what it would be like to get around. First, let’s take a look at these satellite images (taken more than a year ago) of the Chenggong government center (above) and a housing complex to the west of the center (below).

The landscape is characterized by long, 450-meter blocks, gated communities with limited access points, expansive intersections that may be challenging to cross on foot, and a segregation of uses that may require residents to travel great distances to work, buy rice, and to go out for romantic dinners – and compete with other residents for road-space, since the mega-block urban design requires everyone to funnel into the exact same roads. My gut tells me this is a worrisome pattern -- though, I haven't seen traffic forecasts or density plans, so I cannot say for certain what will come to be.

What you cannot see in these images are the new light rail stations (not supported by the Bank) that seem to be placed at a distance from development, in the center of an eight-lane boulevard that can only be safely crossed by bridge. I undestand the stations will not accomodate substantial scooter or bicycle parking, which means they would only be accessible by bus -- I hope this is not the case, where every light rail trip will require at least one transfer…we will see what happens.

The idea of Chenggong is in many ways a planner's dream -- here is a place where the local government had full development rights over a tremendous expanse of land and a seemingly limitless budget. They had the resources to build multiple light rail station connections and the power to move tens of thousands of government workers to this far-flung satellite. And the result....the result could be best characterized as a beautiful monument -- lush, imposing, impressive. Can this be a good foundation upon which to build a vibrant urban fabric? To give this ghost town a chance to live? Only time will tell.

Comments

Part of the problem is that there is an enormous labor shortage in Southern China. The government has been pouring money to improve conditions in the rural parts of the country and as a result there are fewer workers migrating to the south for jobs. In Guangdong alone it is estimated that the worker shortage is in excess of 2m jobs.
I am not familiar with Yunnan Province but in the satellite imagery you linked those apartment buildings you reference look like dormitories attached to industrial facilities. The labor shortage is preventing companies from expanding, or more explicitly they are consolidating in areas where competing factories are located. An example is Changan where I think every jewelry manufacturer in China is now located and it's increasingly congested as a result.

Thank you for your comment – very interesting.
While I am, personally, unsure about the root or prevalence of labor imbalances in other parts of the country, I do not believe this imbalance is responsible for the delayed occupation of Chenggong, which primarily comprises education and government functions.
As I understand, the buildings in the satellite image are units that are for sale at “below-market” rates for government employees in Chenggong, as well as university employees for the ten satellite campuses under construction just south of the government city complex (mostly completed, also mostly empty).

Several years ago, a company from Hangzhou, China took me on a sightseeing trip to 1000 Island Lake, which is not far from Hangzhou. They showed me a residential development that looked every bit like it came from Southern California. It was in absolutely pristine condition in every way. The houses were fabulous. The view of the lake was magnificent. The odd thing was, there were no cars, no people anywhere. This beautiful town was built with the expectation by the individual owners of each property that they would sell their property in the future at a profit, but none of them wanted to live there themselves because it was too far from where business was conducted. So, it was pure speculation and investment risk. I have no idea if anyone moved into that town yet or not, but it would certainly be a nice place to retire to.

Hmmm…
The underlying reasons for the continued relevance multi-lateral lending in China are complicated and varied, and confirmation as to whether “…China can bankroll its own projects” may not be so straight-forward. While I am not qualified to give anything remotely close to an official response, I can give you my own thoughts…
Although rapidly evolving, in general, provincial and national standards for evaluating transport infrastructure funding proposals have been limited to a few key criteria, the foremost being financial viability. In China, local governments are not necessarily required to show how public inputs were incorporated into infrastructure plans, provide detailed alternative analyses that show how the selected infrastructure option is the most efficient and economical means to support a given transport objective, or present similar analyses or demonstrations that may be required in other countries.
When the Bank is involved in an infrastructure project in China, financial merit becomes only one of many equally important lending criteria. Not only do Bank projects require analyses and demonstrations for economic merit, environment planning, resettlement planning, public participation, procurement transparency, and other environmental and social concerns as a prerequisite for loan approval, the Bank will also provide the technical expertise necessary establish “safeguards” to uphold the financial, environmental, economic, and social sustainability of a given project.
Thus, when a local government is developing a high-profile infrastructure project, and the national government wants assurance that the project meets international design and procurement standards, with environmental and social issues managed in a transparent manner, the Bank can actually be a very efficient and powerful intermediary.
I can say from my limited experience working on projects in other countries, the Bank’s contribution to lending programs has been very clear, particularly in developing on-going procedures for ensuring environmental sustainability, creating forums for public participation and precedent for transparency, and in initiating collaboration across different government agencies…
I welcome my more seasoned colleagues working in China to chime in...

I think you have sidestepped the question. Why would the world bank fund projects for cities that are not even occupied or may not be occupied? You cited many requisites for projects in general and all have an element required in your criteria. People. Obviously if China can build ghost cities all over the place, then there is no need for cheap lending.

Thank you for your comment.
It is a good point, though, to my personal knowledge, the Bank has not financed any activities related to the Chinese ghost town phenomenon.
Regarding this blog post, my colleagues and I visited Chenggong out of curiosity, while we were working in Kunming on another project -- we do not have any investment programs in or linking to Chenggong. If we were involved, I would like to imagine that the planning may have turned out differently.
That said, there is no reason to doubt, yet, that this town won't burst to life, once municipal offices and university satellite campuses complete their transition. I know that I am full of anticipation for the final outcome of this venture...
I hope this provides clarification.

While various reasons may be used to explain the emergence of these “ghost cities” across China, the fundamental reason, from a macroeconomic perspective, is lack of appropriate investment channels in China. For those who are familiar with the Chinese economy and the investment climate, it is not difficult to understand that the economic developed is mostly fuelled by investment and fixed asset investment is probably the only suitable way for Chinese investors to achieve asset value appreciation. Local government in China, indeed is the major investor at subnational level. Mayors are under the pressure of achieving high GDP growth and have strong incentive to invest in urban development projects. This is the primary drive of ghost town formation.

Where do local mayors get the kind of capital needed to build new mini-cities. We had some experience with something similar here in Vancouver, with the building of the Athlete's Village, a multi-building residential complex. The pricetag for 11,000 residential units, plus restaurant and office space in approx. 11 buildings over an area of 600,000 square feet, was $1 billion. Admittedly construction costs are likely higher in Vancouver, but these things are relative. The cost of these ghost cities must be enormous.

Without any real knowledge about China, the describtion reminds me of some infrastructure projects in the old USSR.
I can think of the "white sea channel", who was builded at great expense of ressources (and lives) and the project was an engineering succes - but never a commercial succes, infact it doesn't seem that rentability of the finished project was ever a parameter in the decision process, it seems that the decision makers thought that a channel looked like a good idea; an engineering feat and possibility and then they basically just builded it - because they could. The demand for transportation via the channel, turned out to be near null. and the goverment was left with the expense of maintaining a channel, that had no commercial use.
The article also made me think of high speed trains in china - again with limited knowledge about china - it strikes me as odd that they can achive rentability of expensive high speed trains connecting - after all - people whos average wealth level is not very high, while they have great problems with achiveing rentability in high speed train projects connecting, on average, far richer people f.ex. in Europe and Japan.
My guess is that, like in the USSR, the (political) decision process is not based on standard commercial parameters like rentability etc. but on quite other parameters, f.ex. a goal of building this and so many square meters of good housing each year; Since they got high speed trains in Japan - "we also need them" etc.
And if that's true, the impressive growth figures coming out of china, is not quite comparable to growth figures in other parts of the world, since a part of it, is from turning wealth into practical junk - that either needs continuous maintaining or removal and clean up, some day in the future.

IMHO, the problem with this kind of project is the lack of good feasibility study. The project owner didn't take into account of land use, fright and commuter demand and surrounding industrial development at all.

Hope I could have read this post earlier.
In November 2011, Kunming city formed a delegation group and toured several cities in US. We were able to meet with them and discussed about their Chenggong new town plan. It looks like in the current plan they are going to adopt the small street grid in Portland, at least in the plan they presented in the meeting. (I did not realize that something like this were already built during the meeting). This might be an encouraging development of this new town, at least for the part they are ready to build in the future. ( However, I heard also that the city government is facing oppositions to the small grid development from developers.)
It would not be a surprise to me if actually your blog has made some impact here! Great job!

Given the pressure on the West from the number of reufgees and asylum seekers, why doesn't the UN look into arranging for them to be housed in these ghost cities? They could get their benfits paid there from a UN fund that all countries contribute to. A win-win situation.